Operator Good morning, and welcome to the Brunswick Corporation’s 2011 Third Quarter Earnings Conference Call. All participants will be in a listen-only mode, until the question-and-answer period. Today’s meeting will be recorded. If you have any objections, you may disconnect at this time. I would now like to introduce Bruce Byots, Vice President, Corporate and Investor Relations. Please proceed. Bruce Byots – Vice President, Corporate and Investor Relations: Good morning and thank you for joining us. On the call this morning is Dusty McCoy, Brunswick's Chairman and CEO and Peter Hamilton, our CFO. Before we begin with our prepared remarks, I would like to remind everyone that during this call, our comments will include certain forward-looking statements about future results. Please keep in my mind that our actual results could differ materially from these expectations. For the details on the factors to consider, please refer to our recent SEC filings in today’s press release. All of these documents are available on our website at brunswick.com. And now I’d like to turn the call over to Dusty McCoy. Dusty McCoy – Chairman and Chief Executive Officer: Thanks Bruce and good morning everyone. By now I hope you’ve had the opportunity to review our third quarter earnings release. I know a lot of folks have been releasing today. Our quarterly results continued to reflect solid performance across all of our business segments. Third quarter nine-month operating earnings achieved our highest level since 2006. This outstanding performance by our four business segments was accomplished despite some very difficult economic conditions. Consistent with the previous six quarters, our consolidated results continued to demonstrate strong operating leverage. As we highlighted on our second quarter call, our SG&A expenses in the third quarter of 2010 included a favorable adjustment to variable compensation expense. If we exclude…

(Operator Instructions) Your first question comes from the line of Ed Aaron with RBC Capital Markets. Please proceed. Ed Aaron – RBC Capital Markets: Thanks good morning.

Hi Ed. Ed Aaron – RBC Capital Markets: Hi, I guess I wanted make start by (indiscernible) differ on the engine margins in the quarter, you listed in number of factors with those for ability that bridge we see with last year with those kind of order of magnitude as you discuss them?

Yes, (indiscernible). That’s typically they were report that’s only always start report. Ed Aaron – RBC Capital Markets: Okay, helpful. Thank you. And then on the international with the performance was kind of different between boats and engine were seems in Europe. Sounds like you saw pressure on both for not really in engines and then I think in Asia Pacific I think you said that China offset pressure in Australia and New Zealand for the engine business. But I think you can said the opposite about the boat, business just can wondering at high level, how should we think about the differences?

First, we intended to say that China helped the boat engines and boats and I’ll say we think this in Australia and New Zealand in both segments and so if I said differently I apologize. Then is to the difference between the segments let’s try to go for the three things, first in above business we serve recreational market and Europe is after the United States the largest recreational market and it’s been tough there for boat. On the engine side that we serve commercial in government we get a lot of repower and we continue to have a very good P&A business so as long as boats are used. So, that’s important. And then thirdly as you look at boats how we report there is dollar change and we can have just a very small number of very large boats differ on a year-to-year and they can have a pretty dramatic impact on the dollar change so, when you had all that up that’s a different between the two segments. Ed Aaron – RBC Capital Markets: Thank you. And then one last one I’ll pass it on, but at the high-end of your guidance kind of state unchanged, but you have observed the (indiscernible) charge, which we didn’t know about last year. Should we think about the quarter in terms of effectively rates to a guidance excluding that and so what’s the kind of the incremental driver versus when you last uploaded your guidance.

As far as I hope you take low and bottom as the rates is that it was our intent. Secondly, perhaps that the biggest driver as repositioned primarily our marine products this time a year for continued market share growth next year. We need to get a lot of product position and the pull through of retail into our production and wholesale here in the fourth quarter is strong, we have very strong backlog and our dealers are really looking for us the product for them so, we indeed to go to work a little more in the fourth quarter in order to be ready for the selling season next year. Ed Aaron – RBC Capital Markets: Thank you.

The next question comes from the line of Jimmy Baker with B. Riley & Company. Please proceed. Jimmy Baker – B. Riley & Company: Hi, good morning.

Good morning. Jimmy Baker – B. Riley & Company: Can you talk about the promotional activity in the marine engine market may be segregated by outboard and sterndrive, are you feeling the effects of some renewed promotional activity out there in outboard market either here or a broad and may be how do you see that playing out through the boat shows easing in the spring.

Our promotional activity is unchanged on a year-to-year basis. And in fact we are, Peter is just helping me here, he is the fount of all knowledge on numbers. We’re actually helped about lower discounts on a year-over-year basis in both engines and boat. So, we’re growing share here is to real understanding without the need to do any discount in effect for going share doing a less discounting. And I think that attribute to our very strong dealer network. Jimmy Baker – B. Riley & Company: Great. Are you seeing more promotional activity from your competitors may be specifically (indiscernible).

No, no, not at all. Jimmy Baker – B. Riley & Company: Okay, excellent.

You got a good feel of market as you know some manner, so we can go look. Jimmy Baker – B. Riley & Company: Can you may be share the mercury’s P&A number for the quarter.

Which number? Jimmy Baker – B. Riley & Company: A P&A sales in the quarter.

That’s not a level of detail here that we’re going to, I think from time-to-time we have given the percentage of total sales is probably get to the same number, but I don’t know I have that one that’s differ from my finger right now. Jimmy Baker – B. Riley & Company: Okay, fair enough. So I wanted to touch on this retail slide that you offer first thanks for providing that, but I wanting to get some color on MMA reporting lot sales basically here in Q3 and how you kind of reconcile that with the SSI numbers and may be what you are seeing out there and what’s positive – a meaningfully positive growth in aluminum and positive growth in the fiberglass outboard which kind of dominate unit volumes and a category you anticipate in. Would you say that’s fair that you are kind of seeing at least low single digit positive growth in total of your shared the market.

First, you made the things between SSI and in MMA and the chart we publish is really SSI view of the total ministry that NMMA covers kind of a strange way to say it. That chart is an SSI chart. Here’s the way I’d say it. On a year-to-date basis, we believe our retail sales are up 9% versus the industry laying up 1%. And we believe our retail we know our retail in the third quarter was up significantly more than the 9% on a year-over-year basis. So we’re quite comfortable that we are gaining shares. We look at segments, we think we’re gaining share and across the board in stern-drive, inboard fiberglass product. In aluminum fishing product, we are probably losing on little share in outboard fiberglass, but remember also that last year we cut back on the product offering of our Triton brand. And it looks like there is a lot of small outboard fiberglass product getting sold in the third quarter. The other thing I’d point out is the numbers I have given you on our sales growth. It is our global growth and we don’t really report or talk much about what we’re doing in just the US. We continue to ask our businesses to drive growth across the globe, because we think it’s a whole boat world is looking at it, the near-term growth opportunities are going to be outside the US and we got to be very good there. Jimmy Baker – B. Riley & Company: Okay thanks for the color in clarifying that. And just lastly on your debt repurchase activity, well very active in the quarter it was a bit half weighted I suppose and I don’t want to ask for too much detail on your strategy, I know you’re not providing 2012 guidance but can you give us some general color on how the magnitude of debt repurchases will track in 2012 relative to the magnitude that we have seen here in Q3. And kind of what cash if you like you need to keep on the balance sheet and how you will be waiting debt repurchasing again pension contribution?

It’s Peter, Jimmy. First, we will be waiting them essentially equally. We have the same level, we place the same levels importance on returning to our investment credit as we do on fully funding in permissive time, our force and define benefit pension plans. And so you will see that, and this year for example we’re making considerable contribution, $75 million to $85 million, the pension plans, and through today you can see from my remarks $135 million of debt reduction. When we look to 2012, it is not possible now to give any hard and fast rule as to what the balance of cash contributions will be to either of those two strategic imperatives. First because the debt reduction is very much in opportunistic and price in our treasury staff does on a week-to-week, even day-to-day basis. So it really does depend on a lot of moving parts and most fundamentally the price of the debt. And it also depends upon our cash generation capabilities since we move through 2012. The pension contribution of course has a lot to do with moving discount rates and asset valuation and that makes that difficult to asses exactly what we do in the future, but as we look to 2012, I think the only scope I can give is we will continue to reduce debt and we will continue to fund our pension plan and both will be significant calls on our cash during next year. And that is specific if we can get perhaps on our fourth quarter call, when we know a few more facts we will be somewhat more specific. Jimmy Baker – B. Riley & Company: Okay. Thanks very much Peter and Dusty. Thank you for your time.

You’re welcome. Thank you, Jimmy.

Your next question is a follow-up from the line of Ed Aaron with RBC Capital Markets. Ed Aaron – RBC Capital Markets: Hi great, thanks for taking the follow-up. You said about your retails sales in the quarter kind of treating so, 9% number year-to-date, what if memory surge wasn’t the number at Q2 more like kind of a mid sort of mid single-digits and Q3 is a seasonally slower quarter, so that would just imply a pretty massive step up in the quarter. Am I understanding that right? And then if so when you look at the different parts of your business, where did you see that acceleration the most?

Your interpretation in mass is actually right and we saw in both fiberglass and aluminum, but more so in aluminum. Ed Aaron – RBC Capital Markets: Great. And then maybe just one other follow-up on the international question from earlier, as I understand that you are kind of using your capabilities especially in P&A within your engine segment to really kind of get a bigger foothold in some of these markets? And then ultimately you think that the both business would kind of follow that? How do you think about that as we go out the next couple of years in terms of the progress that you are seeing within your engine business in some of those markets and the ability to kind of drive the both business to capitalize on that?

And I am not always sure that the boat business will follow the performance of the engine business, because in these markets especially outside the U.S., the markets themselves are so different, as I said both are primarily focused on recreation. Although I will tell you we are really beginning to move forward on government and commercial business in boats, but for our engine business, we are good at rack, but we also have these other commercial and government opportunities and they can be very different than the rec opportunity. Stepping back here is what’s happening in the boat world in our judgment. Everybody sees the same set of issues around economies and then are looking for growing economies that have lifestyles and consumers who also like boating or can be attractive for boating. And many, many boat builders are going to these economies and therefore, the winners are going to be people who can execute and we really like our chances in that environment. Ed Aaron – RBC Capital Markets: Thank you.

Your next question comes from the line of Tim Conder with Wells Fargo Securities. Please proceed. Tim Conder – Wells Fargo Securities: First of all, again, gentlemen, congratulations to you and everyone on just, I mean continuing great job there.

Thank you, Tim. We hope we are becoming boring. Tim Conder – Wells Fargo Securities: It’s nice to be boring in this trajectory.

That’s what we are hoping. Tim Conder – Wells Fargo Securities: A couple of things here Dusty, given the divestitures of Sealine in the (indiscernible) can you update us if there has been any material change here on your statements that you have made before in the breakeven industry retail units that you need for the industry to achieve the corporate breakeven. And then I guess the corollary of that is you have mentioned that you would have corporate operating margins similar to where the things were in 2005 at a certain level of retail unit sales. So, based I guess on those figures if that has moved the needle ending with these divestitures.

I am going at this way. The divestitures have had an impact, but more importantly, as our businesses have rolled up their sleeve and they have done a magnificent job in identifying organic growth opportunities. We think the margin and margin dollar targets that we previously disclosed are no longer applicable and we have not really set down and redone the numbers in a way that we can talk about MTM, but if we have said our 200,000 units we would make more margin dollars than when the industry was at 300. That number is fairly significantly lower now in our view based upon our ability to go forward, but we have not done any detail calculations around that and that’s something maybe in the next call or two we will sit down and give folks a view there, but these numbers have been lower, but that is driven by our folks done a great job identifying beginning to execute against our granite growth conditions. As what it’s lowered is the marine market volume necessary to achieve the objectives that we set out, gosh, I think it was in 2009. Tim Conder – Wells Fargo Securities: Great.

So, as a result of cost reductions and other things we’ve done at the company, we find that we can achieve those numbers and even lower growing market, but it just we said we haven’t seen the need to continually updated because we think our performance is in and up itself ratification that we are able to significant exceed those 2009 objectives. Tim Conder – Wells Fargo Securities: Okay, okay. And then gentleman, I think you’d refer to one of the prior answers, the prior question that you were ramping up you sold the need the ramp up the papering a little bit just because of the good pull through and one of the prior chart that should given I think you’d said some more between 15,000 and 16,000 units in the inventory was a goal just an updated number from that perspective.

I think it’s going to be right now in the sort of market conditions we see, I think we’d locked to walk out of this year was around 17,000 in (June) and the way to think about it is I said this in my prepared remarks under 24 feet fiberglass and aluminum we moved up so that we can keep our dealers in both going to the selling season above 24 feet fiberglass we really got out hands around that one carefully and we continue to run a record low levels. If you ask me my concerned about any of that I’m going to give you surprising answer which you didn’t ask me, but I do have a concern and the concern is may be we don’t have enough in the pipeline on some of the smaller product, but our guys are working real hard to make sure we were positioning our leaders well for that showing too. Tim Conder – Wells Fargo Securities: Okay. And obviously that has implications to your – what you’d done here with your guidance and goes to the one of the questions I added ask earlier about the raising of the guidance. Peter, directly I think you gave us some numbers that you’d already repurchased I think you said $23 million in the quarter on debt and how much is that plus anything additional above that factored in to your $0.65 to $0.75 for the full year.

What we said, well, the $0.65 to $0.75, Tim is an all in number takes account of any activities that we contemplate the present time including any remaining fourth quarter debt reductions. Tim Conder – Wells Fargo Securities: Okay, okay, okay, helpful sir. Thank you. And then just the couple of housekeeping items, anything that you can say at this point on restructuring expectations for 2012, D&A CapEx for 2012 and then you said that the fourth quarter interest run rate would be about 17,000. As you look to would that be exiting fourth quarter and obviously depending on how much more debt you repurchased, but then should we annualized that 17 would that be a good starting point and may be goes a little bit lower for 2012.

Yeah, first on the restructuring, that’s obviously a function of decisions that we may in the future we would certainly expect and we said here now as to have a lower restructuring number next year, but that’s not something we can absolutely promised because that’s will be what the future holds and in terms of interest for next year we did say that now the run rate has been reduced to $17 million and I can only say to the extent we buyback some more debt in the remainder of the fourth quarter that number multiply by four would go down somewhat as a run rate, but I don’t expected there is going to be a significant if you will improvement in that interest number because we have purchased already brought back $135 million notional of debt already this year and in the next couple of months, I don’t think that we will continue unless the opportunity is normal, I don’t think we’ll continue at our phase. Tim Conder – Wells Fargo Securities: And then the D&A CapEx, Peter at this point.

For 2012, please stay tune for the conference call three months from now. Tim Conder – Wells Fargo Securities: Okay. One other thing, I think that you’d mentioned before gentlemen is that you talked about an annualized run rate of break-even on an operating basis for the boat segment, exiting in the fourth quarter of 2012. Again at this point, would that imply that you’d still expect an annual loss in boats for 2012 or trying to get reconcile and given the fourth quarter is traditionally a tough quarter to begin with on a seasonal basis, or should we expect a profit out of the boat segment in 2012, assuming you’d have larger seasonal quarters would be substantially reduced losses year-over-year or even may be some profits?

Kim it’s a bit too early for us to give you those precise numbers because we have not done our plan yet for 2012. Tim Conder – Wells Fargo Securities: Okay.

We will be able to give you a good view of that in January call. Tim Conder – Wells Fargo Securities: Okay. Great, I’ll get back in queue for any other questions.

Thank you.

Your next question comes from the line of Laura Starr with Nuveen Asset Management. Please proceed. Laura Starr – Nuveen Asset Management: Hi guys, how are you?

Well, how are you? Laura Starr – Nuveen Asset Management: Fine, you talked about expanding your relationship with I can’t remember who was gave comments on the diesel engine strategy. And I am curious on that, if you could just give us a little more color, is that because you can get it into a better customer group. I mean government and commercial customers especially overseas want diesel, more diesel engines. I mean what about the consumer market and if you could have had a better diesel offering now, was your share you think have been even higher, I mean can you talk about those opportunities (indiscernible).

Laura Starr – Nuveen Asset Management: Will you be able to, will that be a big push in 2012 or not be till 2013?

No, we’re going right now. Laura Starr – Nuveen Asset Management: Okay.

We announced that at the general boat show in September and early October and we’ve got folks lining up for the engines. Laura Starr – Nuveen Asset Management: Are they significantly more expensive than your existing line up or are they the same price just keeping them more offering to pick some?

It just gives us more offering to choose from and again it permits us to serve non-US markets who prefer diesel in a much more effective way. Laura Starr – Nuveen Asset Management: Okay, thanks.

You’re welcome.

The next question comes from the line of (indiscernible). Please proceed.

Hi guys, I actually had a couple of questions on your fitness segment. And just see how you view the overall market going forward on the commercial side if you’re seeing a lot of new gyms opening up and if you are gaining market share there?

Perhaps Peter and I both should talk to this. Peter has actually managed the business for good period.

Great, great.

We are clearly gaining share in our view and we’re seeing a bifurcation of the fitness market and I’ll let Peter speak to that and how well we’re doing.

Okay.

Well, I think the fitness market is extremely good now for two reasons, first proprietors, health clubs, and hotels and gyms and universities are beginning to replenish some of the deferred maintenance of the machine rate that they did in the past over the difficult two years. So, the equipment has different spends of life, but over time it needs to be replaced and when someone improving economic conditions you see the fitness industry beginning to reinvest in an equipment. So that’s good across the board.

All right. Are they mostly replacement machines or they actually expanding their….

No, that’s actually the second part of the (indiscernible).

Okay.

The bulk of the industry replacement but there is also very nice increase in new health clubs that are driven to a great extent by the value proposition that says that with the somewhat more difficult economic times people are very interested in having an option of health clubs where there monthly fees can be within there individual budget. So, the (indiscernible) industry is growing at both into the spectrum. First is growing on the value side with smaller clubs it have less offerings but they have a lot of fitness equipment.

Correct.

It also beginning to grow again on the high-end side for the upscale growth it all for our four major of offerings and so on both accounts life fitness (indiscernible).

Excellent. And then I note historically you guys have been mostly all in commercial is there any push to go into the consumer market I know you guys evaluated around $3 billion. So, it seems like a significant market opportunity.

We’ve always said presence in consumer. We are certainly attempting to grow our consumer presence because it is just arithmetically our greatest market share opportunity. I think that we have more opportunity so, we’re seeing more opportunities actually outside of the U.S. on the consumer side and within the U.S. But it will be an area of focused by fitness but importantly it will not diverted by fitness is focused from in score central meet in the theatres product line which is commercial.

Great. Thanks guys.

You’re welcome.

Your next question comes from the line of Carla Casella with JPMorgan. Please proceed. Carla Casella – JPMorgan: Hi I have a similar question on the commercial side, but in the other segments. Can you just remind us what percentage of the marine and the boat business is now commercial – commercial and government I guess includes both together.

On the boat side is relatively small it’s going to be under $40 million under $30 million in that range. On the engine segment I don’t actually know that because we did not something we track like we do on the boat side. Because we have a business segment in the boat side, that’s when you math do little bit of follow-up with Bruce, Carla. Carla Casella – JPMorgan: Okay, but that sounds like at the growing area for mercury especially overseas is that correct?

Sure it’s an opportunity for us. Carla Casella – JPMorgan: Okay great. And then at this point are you hedging any of your current (indiscernible) exposure?

What we have modest currency hedges usually about 50, 50% of our larger known exposures, but it is just maintain in our hedge. Carla Casella – JPMorgan: Okay. I guess that’s all. Thank you.

You’re welcome.

Your next question is a follow-up from the line of Jimmy Baker with B. Riley & Company. Please go proceed. Jimmy Baker – B. Riley & Company: Thanks for taking the follow-up. Just a quick one on the follow-up to the fitness commentary earlier, and could you maybe give a little color on what allows you to drive such high incremental margins in that business maybe kind of what the long-term if you can give over the next at least couple of three years what the right kind of operating leverages to think of how that business. And separately as if you do become kind of expose to the consumer market and more kind of successful in that vertical. Is that kind of deteriorate of operating leverage potential of this business?

Well, we will not answer the last question first. What we’re certainly not going to engage in those portions of the consumer segment, the marketplace that would had significantly lower margins from the commercial marketplace that would not be an objective. We are enjoying very, very excellent sales and operating margin conditions at the present time, Jimmy and that is a function of things that will continue in the future, which is that we have fabulous products, the life fitness team has the fabulous sales force, terrific installation, terrific service, terrific accessibility, all the things that health club proprietors want a need all that will continue in the future and we open the product. So, it will be even accelerated. It is also true that the life fitness is at the present time the one of the most significant suppliers of choice because it is an extremely stable company, it is got a very, very known and well-recognized management team and it is under the umbrella of the stable larger holding company with the stable capital structure and for health club proprietors. I think they want to do business with the entity for the management team and everything about the business looks like it’s going to stay there. And I think that drives significant sales and earnings at the present time, which may not always the case in terms of the competitive situation. So, will these operating margins continue at their current terrific rates perhaps not will they always be strong double digits, yes.

Jimmy, I’d like to just comment one to add Peter to this brand is a really powerful brand. And one of things we don’t want to do is going in any markets where we get drag into competitors that wanted play discount price. Our brands stands for extreme quality, durability, reliability and the point Peter may high end or low end we’re winning the battle with our equipment on both hands of these clubs and that’s because of how great the equipment is the lowing that computed in forget about it. How you got computed in and these got a right for his consumer, for his customer then nobody else can provide. And we’re going to protect this brand going forward very, very diligently, but it’s a great brand, so, it’s a great business team there really performing well. And we want to be very careful and trying to push them into markets that they don’t really belong. Jimmy Baker – B. Riley & Company: That’s very helpful. Thanks. And just one more quick and I’ll ramp up and looking for some kind of qualitative commentary regarding you’re the sediment in your dealer network and maybe if you could compare sediment today at this time year ago and, I mean 2011 to-date seems in-line with your expectations would say with in line with your dealers expectations and maybe how do you see their sediment impacting the appetite for inventory risk you model in 12?

First, I think our dealers in our aluminum product line up, you better this year than they did last year. They’ve done a magnificent job of capturing share. They pushed us very well keep the product upcoming and we continue to introduce new product and ramped up our manufacturing to serve them. And there view in general is that please keep us stock so that we can exceed at selling season on phones. On the fabric last said I think in smaller product that’s seems we generally there review is not quite a strong as it is aluminum, I think in large fabric last product both we want dealers are going to be very cautious that’s (indiscernible) inventories are record loads in the amount of states in those products and they’re going be careful and large consumer sentiment and economic conditions in ‘12 before we could set to really begin to ramp up and put more product in their dealerships. Jimmy Baker – B. Riley & Company: Thanks very much, Dusty.

You’re welcome.

There are no further questions in queue. At this time, we would like to turn the call back to Dusty McCoy for some concluding remarks. Dusty McCoy – Chairman and Chief Executive Officer: First, thank everybody for serious of excellent and great questions. They all went to the heart of several issues and how we are performing. I am incredibly proud of our organization and what it’s doing and always said it a bit jokingly at one point to call, we do want to become boring and we want to get away from big swings in this business than I hope as you watch as you become more and more comfortable that we just continue to perform and grow the top and bottom line with that worrying too much about overall economic conditions. So, thank you for your time and we will talk to you if not before in the next call.

Thank you for your participation in today’s conference. This concludes the presentation. You may now disconnect your lines.